Public Accounts Committee on March 26th, 2009

[The Chair, Liberal, Shawn Murphy]

Perhaps I'll ask Mr. Wouters or Ms. Fraser to elaborate.

We are getting another report on Monday, a report on the appointment process, but we're not there yet. Could I ask either one of you to elaborate?

[Wayne Wouters]

The policies that Mitch was referring to are policies that apply to public servants. They do not apply to Governor in Council appointees. These are policies that set the terms and conditions of employment for public servants under schedule 1 of the act. It does not apply to GIC appointments.

[Meili Faille, Bloc, Vaudreuil—Soulanges, QC]

That somewhat clarifies the direction I'm giving to my questions. I thought it also concerned Governor in Council appointments.

I have another question, if I have some time left. In the 2003 audit, Ms. Fraser, you considered problems at the Office of the Privacy Commissioner and Office of the Correctional Investigator. In both cases, you found that there was inadequate oversight and that there was also some difficulty detecting irregular activities.

In your current study, have you seen any improvements? Have you also detected any additional oversight mechanisms?

[Sheila Fraser]

Thank you. I would say yes. One of the most important mechanisms that we noted is the creation of the audit committee and the internal audit service that covers all the small agencies, and also the introduction of what we call the MAF in English. In French, I believe it's the CRG, the Cadre de responsabilisation de gestion. The MAF is a tool used by the secretariat to analyze management of the departments and agencies. These are important tools that have been put in place since then. For example, we conduct an audit of the officers of Parliament every year. So a number of mechanisms have since been introduced.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Ms. Faille.

Mr. Christopherson, for seven minutes.

[David Christopherson, NDP, Hamilton Centre, ON]

Thank you very much, Chair.

Thank you all, again, for coming—those who are new and those who've been through the drill before.

As I said at the time this report was tabled, I too in a previous life have had some experience being responsible for smaller entities and having them report to me. So I am aware of the challenges of trying to manage all of this and I understand the seriousness of it. But I have to tell you I'm a little disappointed with your response, Mr. Wouters, and I'll tell you why.

In your response today, you state on page 2 of your opening remarks that the Auditor General's “findings contribute to the work that is already underway to foster good governance throughout all our operations”. I hear that, and it sounds like your thinking is, oh, thank you for the nice little report; it helped us do some of the little we were hoping to get around to do. It just didn't sound like it was taken seriously.

And then what I read on page 8 was, “The reporting burden has been a long-standing issue”, which you then go on to explain. But there's no sense, Mr. Wouters, you're taking it seriously, that this is a problem that needs to be dealt with soon. I get the impression that you accept that it's a problem, but that it's going on and on and on.

Last, your conclusion was, “I believe we have come a long way towards achieving the right balance in our dealings with small entities...”. Yet that's just a response versus what you were faced with on page 16 of the Auditor General's report, a subheading that read, “The reporting burden is well known and long-standing”, and paragraph 2.53: “ The reporting burden is a long-standing issue. It has been pursued by the Small Agencies Administrators Network (SAAN or the Network) for many years, and was clearly defined in a series of studies commissioned in 2003, 2004, and 2007.”

The Auditor General also went on to say on page 17, in a subheading, that the “Actions taken to date have not substantively addressed the reporting burden”, and in paragraph 2.55, that “Five years after acknowledging that they have a role in reducing the reporting burden, the central agencies have not taken substantive action to reduce it.”

So help me to understand, Mr. Wouters, the serious issues the AG has raised and your rather lukewarm responses—and that's my word, “lukewarm”.

[Wayne Wouters]

Thank you, Mr. Chair.

I think we have taken this very seriously. Where the initiative really stems from or goes back to is the public service renewal. If you also read the Tellier-Mazankowski report on the web of rules, or the fact that we've created way too many rules with too many reports, it shows this issue is not only for small agencies, but also that we're looking at this right across the government. And small agencies have, I think, really felt the full impact of this.

So I take exception to the honourable member's point about our not having done anything, because I said the most—

[David Christopherson, NDP, Hamilton Centre, ON]

Did I say that? I think the Auditor General made a reference. I don't know that I said you didn't do anything.

[Wayne Wouters]

But this was back in 2006, and I think if you look at it over the last couple of years, the most difficult set of reports...I'm sorry, March, I guess it was 2008, but for the period prior to 2008. But if you look at it over the last year and a half, one of the areas that we did focus on--and Mitch Bloom can talk about this--was the whole area of HR reporting. It was probably the most significant issue and the most significant area.

That is where we had the most reports, so we said, let's focus on where the burden is the greatest: HR reporting. We had a number of different organizations there: the Treasury Board Secretariat had reporting requirements, the old agency had a reporting requirement, and the Public Service Commission had reporting requirements. We said, can we make progress in that area?

I think we have made substantial progress. Mitch can outline exactly where we are. I said an 85% reduction on how we got there; Mitch can explain that. But also, as I said, in the last year and a half we have fundamentally changed most of our policies, which now will lead to a reduction in reporting for many of those small agencies.

MAF is another area. We've reduced the reporting requirements through MAF by 50% for these organizations. They are required to do an assessment only once every three years. Also, for the very small agencies, the micro agencies, we don't require them, in fact, to submit all the information that other organizations do. Now they essentially have to come in and have an interview with us, as opposed to submitting the full reports.

So if you look at the overall set of initiatives under way, I agree that we still have further steps to take, but we are looking at it, we are looking at it seriously, and we are making progress.

The one area I will come back to that we probably have not made as much progress on is the area of those reports that are a legislative requirement or a parliamentary requirement. As I said, of the 100 or so reports, 27 of those are either parliamentary or legislative requirements. That's something that perhaps we could have a discussion with you as--

[David Christopherson, NDP, Hamilton Centre, ON]

I hear you on that. I have to say, though, that I'm still just one member. I'll listen to my colleagues, but I would have liked to hear a little more seriousness. What I'm getting is that you want us to acknowledge how well you've done, and what I'm looking at is that it's been pointed out that you haven't done that well, and you don't seem to want to say that. That always makes me frustrated.

Let me get into a question on this, on a detail. Again, it seems to me that everybody wants to talk about doing something, but nobody's really doing anything. That's my biggest concern.

On the reporting burden, the report states on page 18, at point 2.56, “The Secretariat brought to our attention its policy renewal initiative, which it believes will lead to fewer policies and fewer reporting requirements”. You've already alluded to this. It states, “The initiative was launched in 2005 with the objective of streamlining policy instruments and clarifying the accountabilities and responsibilities of ministers and deputy heads”. Later in that paragraph, it says, “Treasury Board officials informed us”--that's the Auditor General's department--“that this project will be ongoing into the 2008-09 fiscal year”. Finally, it says, “The impact of this initiative on the reporting burden will not be known before it is completed”. That just blows me away.

Then in March 2008, there was a committee formed. In point 2.57, the AG tells us, “However, at the time of our audit, the committee was just getting started and had not yet made specific plans or taken any concrete action”.

We've had reports going back for years. In 2005 you decided to do something about it and get serious, but we don't know exactly how much of the burden will be reduced when you've done the exercise, and the exercise is not going to be done until, at the earliest, next year. That's half a decade.

That's a long time to merge policies or to reduce policies. I'm sure there's a good answer, but it blows me away that you're going to go through this whole process and you really don't have any idea of how much of the burden it's going to alleviate at the end of it. Help me understand.

[The Chair, Liberal, Shawn Murphy]

Mr. Christopherson, you're out of time.

[David Christopherson, NDP, Hamilton Centre, ON]

Yes, I'm out of time. Thank you.

[The Chair, Liberal, Shawn Murphy]

Go ahead, sir.

[Frank Des Rosiers, Assistant Secretary, Treasury Board Secretariat]

Thank you, Mr. Chair.

In terms of understanding the honourable member's concerns about the state of progress, perhaps just before I dive into the specific question being addressed, I would like to step back a little and have a look, because I think we all agree it would be very tempting to do a quick cleanup and just throw all of those rules into a garbage bin and start afresh.

[David Christopherson, NDP, Hamilton Centre, ON]

You've already missed that chance.

[Frank Des Rosiers]

We've had those discussions with colleagues in other jurisdictions, at the provincial and international levels, and I think it's important to remember that doing that kind of cleanup is fairly tedious. It's one of the reasons those rules and the associated reporting burden have been around for the past several decades for most OECD countries. They take a lot of time and effort to clean up.

In the case of policy renewal, the commitment was very clear that we wanted to have a major review of all of them—there were 180 of them—with all of their associated directives and standards. So it is quite a pile, trust me, to review. We didn't just want to trash them and improvise a new set of rules that would create more problems and more headaches for departments thereafter. So in order to do it in a thoughtful and structured fashion, it does require careful review and discussion with departments to do it properly.

[David Christopherson, NDP, Hamilton Centre, ON]

For half a decade?

[Frank Des Rosiers]

In terms of the actually target, we'll be going down from the initial 180 policies to 45. This we already know. The 45 policies will be completed by the end of the year.

In terms of the associated reporting burden for the remaining 45, the reduction will be in the order of 25%. Will the number be slightly higher or slightly lower? We'll see, but it will be very much in line with those targets.

So we do feel very confident this work will be completed and that we'll achieve the objectives laid out.

Secondly, on the activities of this ADM committee, which gathers together not only central agencies but also representatives from smaller organizations, it is true that at the time of the AG's report this committee had just recently been formed and there were not yet any concrete results to report. But much of the activities of this ADM committee, during its first six months or so of operations, was focused around the people component—the one that my colleague Mitch Bloom spoke to briefly—which resulted in fairly dramatic positive reductions for all departments, particularly the small ones.

So I do believe it speaks to some progress.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Mr. Christopherson.

Mr. Saxton, for seven minutes.

[Andrew Saxton, Conservative, North Vancouver, BC]

Thank you, Mr. Chair.

Thank you all for being here today.

My first question is directed at the Auditor General. Auditor General, can you explain to us, in your opinion, how this report stacks up against previous reports on small entities?

[Sheila Fraser]

Chair, to my knowledge, we have not done a specific audit of these issues in small entities before now. We have done certain work on specific small entities, which has tended to indicate there were problems in these entities. But this is, I believe, the first time the office has looked at these kinds of issues broadly.

[Andrew Saxton, Conservative, North Vancouver, BC]

Can you let us know how the requirement for qualified chief financial officers is being met and how that relates to the small entities?

[Sheila Fraser]

Thank you for the question.

There was a new requirement put in, probably about two or three years ago, I guess, on chief financial officers.

[A voice]

Two years ago.

[Sheila Fraser]

Two years, probably.

That resulted, in part, from an audit we did, I believe, in the Office of the Correctional Investigator Canada, where no one actually wanted to assume the responsibility of saying they were the chief financial officer—probably for good reason in that case, as there were some untoward transactions. The committee members who were around then will remember this. After that, there was a clarification made to the policy so that every department and agency had to designate quite clearly a chief financial officer, and that chief financial officer obviously had to be aware of his or her responsibilities.

That was certainly a good response, in part, to the problems we saw in that audit.